Chip The Chartist Weekly Report – 20-Jan-13

First up this week is AUDUSD on the 4 Hour chart and a Quick tip from me.

My Quick tip is to “Count The Big Bars” within a Chart pattern to help determine potential direction.

Since 10-Jan, within this triangle, there have clearly been more “Big” Red than Green bars – This indicates Seller strength and favours a downside move next.

GET INVOLVED

If the next move is to be to the downside (as my Quick Tip suggests) it would be preferable to first see some confirmation in the form of a close below the Uptrend-line.

Entry
On close of the candle which closes below the Uptrend-line. Or, more conservatively, on a break of the Low of the candle which closes below the Uptrend-line.

Stop
An aggressive Stop could be placed above the High of the “trigger” candle. Much more conservative would be above the Downtrend-line.

Target
There is no real potential resistance on the Short side until around the previous support levels of 1.0400 and 1.0350.

GET INVOLVED

GBPUSD closed below it’s 200 Day Moving Average on Friday and is now close to it’s previous low (made in November last year).

A break and close below this low on the Daily chart would provide confirmation that GBPUSD is heading lower still. Some caution is due here though as the first attempt may prove to be false – The RSI on the Daily chart is currently indicating Oversold.

Entry
On close of the candle which closes below the previous low. Or, more conservatively, on a break of the Low of the candle which closes below the previous low.

Stop
Initial Stops should be placed above the High of the “trigger” candle and the 200 Day Moving Average.

Target
Little in the way all the way down to 1.5300 and those with an even longer term view could use a Trailing Stop above the 200 Day Moving Average.

GET INVOLVED

This is one of those instances where you should remember “The trend is your friend”. The only trades I would be looking at in JPY at present would be on the Long side with a Long term view of further weakness throughout the year.

Even evidence of a Lower Low (as seen at the beginning of the year) would not be enough to interest me here on the Short side.

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DISCLAIMER & COPYRIGHT

This report is based on my analysis on my charting package. It may differ to yours as it can be affected by time, market movements, charting packages and broker prices. I accept no liability for loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on any information in this report or analysis.